Columbia Sportswear 2003 Annual Report Download - page 27

Our primary capital requirements are for working capital, investing activities associated with the expansion
of our global operations and general corporate needs. Net cash used in investing activities was $46.9 million in
2003 and $38.0 million for the comparable period in 2002. In 2003, our investing activities included $29.9
million for the acquisition of Mountain Hardwear, net of cash acquired, and $17.1 million for capital
expenditures including approximately $10.4 million related to the initial phase of construction of a distribution
center in Henderson County, Kentucky.
Cash used in financing activities was $5.3 million in 2003 and $15.1 million for the comparable period in
2002. In 2003, net cash used in financing activities was primarily for the net repayment of notes payable of $9.9
million, the repayment of Mountain Hardwear’s debt of $6.4 million, and the repayment of the Company’s long-
term debt of $4.5 million, partially offset by proceeds from the sale of stock under employee stock plans of $16.1
million. In 2002, net cash used in financing activities was primarily due to net repayment of borrowings on short-
term notes payable of $16.9 million and net repayment of $5.1 million on long-term debt, offset by proceeds
from the sale of stock under employee stock plans of $6.9 million.
To fund our domestic working capital requirements, we have available unsecured revolving lines of credit
with aggregate seasonal limits ranging from $30 million to $75 million, of which $5 million to $50 million is
committed. As of December 31, 2003, no domestic balance was outstanding under these lines of credit.
Internationally, our subsidiaries have local currency operating lines in place guaranteed by us with a combined
limit of approximately $88.8 million at December 31, 2003. There were no balances outstanding under these
lines of credit at December 31, 2003.
Additionally, we maintain unsecured and uncommitted lines of credit with a combined limit of $250 million
at December 31, 2003, available for issuing letters of credit. At December 31, 2003, the balance outstanding
under these letters of credit was $110.1 million.
As we continue our investment in global infrastructure to support our growth, we anticipate that capital
expenditures for 2004 will total approximately $45 million, consisting of maintenance capital requirements and
information technology and distribution projects. In 2003, we broke ground on the construction of a distribution
center in Henderson County, Kentucky primarily for the purpose of distributing footwear products. This
distribution center is expected to consist of approximately 450,000 square feet, cost an estimated $40 million to
construct, and begin shipping products in 2005. As of December 31, 2003, capital expenditures for the Kentucky
distribution center totaled approximately $10.4 million.
Although the Kentucky distribution center will be constructed primarily to support our footwear products, it
will be designed and engineered to support other product lines as well. The facility will improve our proximity to
major footwear customers and, we believe, will facilitate reorders. We expect to fund these capital expenditures
with existing cash and cash provided by operations. If the need arises for additional expenditures, we may need
to seek additional funding. Our ability to obtain additional credit facilities will depend on many factors, including
prevailing market conditions, our financial condition, and our ability to negotiate favorable terms and conditions.
We do not assure you that financing will be available on terms that are acceptable or favorable to us, if at all.
Our operations are affected by seasonal trends typical in the outdoor apparel industry, and have historically
resulted in higher sales and profits in the third calendar quarter. This pattern has resulted primarily from the
timing of shipments to wholesale customers for the fall outerwear season. We believe that our liquidity
requirements for at least the next 12 months will be adequately covered by existing cash, cash provided by
operations and existing short-term borrowing arrangements.
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